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Mexico has 27 million households. Twenty-two million of them are low income. Even though banks reach them physically, almost none of these people choose to use bank accounts to manage their money. In this 8-minute film CGAP’s Xavier Faz talks with...

CGAP encourages and supports financial service providers to adopt customer-centricity as a business model. As part of that effort, CGAP helps financial service providers gain a better understanding of customers by studying and supporting approaches to obtaining and integrating customer insights. A deeper understanding of demand can be key to designing more meaningful, sustainable, and responsible service offerings.

Customer insights can be sourced in many ways, through listening to target clients using a range of techniques (e.g. interviews, focus groups, consumer surveys, and quantitative research), and by observing customers’ actions (through observation and shadowing, design thinking, and behavioral research). Frontline staff and management can also share insights on clients through interviews and focus groups. Finally, mining existing client-level data from management information systems (MIS) and customer management systems (CMS) can provide a wealth of useful information on clients.

The surge in interest and progress in understanding clients’ needs builds on important earlier work going back several decades: Organizations such as USAID and MicroSave pioneered a range of client assessment and research tools – including MicroSave’s Participatory Rapid Appraisal methodology – that have been used across the globe.

More recently, the financial diaries have helped to provide a deeper and more nuanced understanding of poor people’s active financial lives, their cash flow management needs, and their agile use of informal and formal financial services. There is also greater, more refined, and empirical use of segmentation analysis to understand clients across numerous dimensions, as well as Human-Centered Design approaches. Impact evaluations using randomized control trials (RCTs) have also become more common in financial inclusion.

The most recent developments in understanding clients is coming from the field of behavioral economics, which provides insights into the psychological underpinnings of everyday money management decisions. The premise behind this growing body of work is that a better understanding of social, cognitive, and emotional factors can help reveal why people—poor and rich—behave the way they do.

In the 2000s, FinMark Trust initiated the first globally recognized demand-side data source, the FinScope studies, to explain how individuals manage their financial lives and provide insight into attitudes and perceptions regarding financial products and services. FinScope studies allow for measurement of financial inclusion indicators at a sub-national level.

Since 2011, the World Bank Global Findex – funded by the Bill & Melinda Gates Foundation – provides extensive data on how adults in 148 countries save, borrow, make payments and manage risk, allowing a deeper understanding of clients and comparison across different country settings. The survey collects information on 506 indicators from at least 1,000 individuals within each country.

More recently, InterMedia – in partnership with the Bill & Melinda Gates Foundation – launched the FII ‘’Finclusion’’ program, conducting quantitative surveys and related qualitative studies to explore the “what,” “how,” and “why” of demand-side trends in mobile money and other digital financial services. The FII program currently conducts research in eight African and Asian countries.

One constraint to expanding access to finance is the lack of fine-grained, demand-side information on poor people’s needs, preferences, behaviors, and how providers can best serve them. To advance this kind of client research, CGAP launched the Customers at the Center Financial Inclusion Research Fund in partnership with The MasterCard Foundation. The Research Fund aims to play a catalytic role by supporting client research projects to produce new insights for the industry and entice stakeholders to build on these.

The Research Fund supports five projects focused on understanding client needs and delivering services that respond to these needs. The projects supported by CGAP focus on increasing the knowledge in either of the following areas: (i) fine-grained understanding about poor people’s needs, preferences and behaviors, (ii) different customer segments to be served, and (iii) client usage of informal as well as formal financial services.

Supporting financial service providers’ knowledge and understanding of customers’ needs, preferences, and behaviors is a stepping-stone toward greater customer centricity. Through a deepened understanding of their customers, financial service providers can enhance their service offerings and, as a result, increase uptake and usage.

Publications

This research paper covers the “Financial Inclusion for the Rural Poor Using Agent Networks” project, which was conducted to gain a better understanding of the impact of different strategies to promote financial inclusion among rural poor households in Peru.

Financial institutions serving the poor can offer a range of savings, insurance, and even nonfinancial products in addition to their core credit products. Bundling these products into one packaged sale can be a cost-effective distribution strategy and a means to differentiate the provider’s offering by its added value to clients.

From Our Blog

"Resilience" refers to the ability to anticipate, respond to and recover from shocks. Freedom from Hunger used “resilience diaries” with 46 households in Burkina Faso to research whether financial services could play a greater role in building household resilience.

In an increasingly competitive marketplace, could the bundling of credit with non-credit financial services be a viable solution for FSPs? EA Consultants designed and implemented a study with Crezcamos in Colombia to find out.